9 months on, do you understand when the SDLT higher rate changes apply?

18th January 2017

The new Stamp Duty Land Tax (SDLT) came into effect on 1st April 2016, there are a number of factors that are commonly confused. In this article, we look at the most frequent queries we receive:

We are selling our only property and buying another one which will complete on the same day, do the higher rates apply? As long as you are replacing your main residence the higher rates will not apply.

My spouse/civil partner owns a property oversees, I now wish to buy a property in my name – do the higher rates apply? Yes, as under HMRC rules a spouse/civil partners are treated as one entity. Any purchase by you will be deemed an additional property. Higher rates will be due.

I am buying my first property as a buy to let – do the higher rates apply? No as long as you (and your spouse/civil partner) do not own any property in any other country then the higher rate does not apply.

If I purchase a property in the name of my company rather than my own name will the higher rates apply? Yes all company purchases attract the higher rates (be it purchase number one or ten). Any purchase over £500K by a company has additional implications which will require specific tax advice.

I am buying a second property as a buy to let – do the higher rates apply? Yes, as you already own another property. This first property can be anywhere in the world.

I intend to rent my current property and buy a new one – do the higher rates apply to my new purchase? Yes, as you will own two properties.

I am purchasing my first property with a friend who already owns another property – do the higher rates apply to me? Yes as this will be a second property for your friend.

I am moving but I have not yet sold my main residence - do the higher rate apply to me? Yes but you may be entitled to a refund if you sell the property within three years of this purchase.

I already own another property with a friend but I am now buying a property on my own? Do the higher rates apply? Yes as this will be an additional property.

I sold my main residence last year and have been renting waiting to find the perfect home – will the higher rates apply to this purchase? As long as you or your spouse/civil partner own no other properties the higher rates will not apply as you have sold within three years of this purchase. HMRC may require evidence of the sale at a later date if they decide to investigate.

I have inherited my parents property but I intend to sell this after I have renovated this property. Will this attract higher stamp duty rates? Yes as you will own two properties on completion. You may be able to claim a refund depending on the date of the sale (see above)

I am separating from my partner, we never married. We own a house together but I am buying a house in my own name. I will not be removed from the title on the house we shared for a while. Will I pay higher rate stamp duty? Yes if this purchase completes before you are removed from the title to the property you shared with your ex-partner.

My husband/wife/civil partner and I are buying a new main residence now and will sell our current main residence next year. Will we pay the higher rate? Yes are you will own two properties. You may be able to reclaim the additional tax paid if you sell your main residence within 3 years of buying your new home. To do this you will need to make an amendment to your original SDLT return made for your new home purchase within 3 months of the sale of your previous main residence. You should therefore take advice from the conveyancer acting for you in your sale to ensure that the relevant evidence is obtained for you to submit the claim within the required timescales.

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